With most homes on the market receiving multiple over asking price offers within days of being listed it is easy to assume that selling your home is a piece of cake. This has some homeowners scratching their heads thinking, “Dang, I can sell this myself and save thousands on commission. Why do I need a Realtor?”
Listing your home for sale by owner means you are willing to manage a transaction worth hundreds of thousands of dollars with no experience. Here’s 5 reasons why that is to put it bluntly, a terrible idea, especially in this chaotic market.
- Setting the wrong asking price can cost you thousands.
- Licensed agents might not show your property, leaving you with less qualified buyers.
- Selecting the wrong offer can cost you time and thousands of dollars.
- Inexperience in negotiating price and terms including repairs can cost you thousands.
- Lack of knowledge regarding disclosure requirements can leave you legally vulnerable and cost you thousands.
Do you notice a theme? Bottom line: Doing a difficult job for which one is not qualified can be costly in all regards.
Setting the wrong asking price can cost you thousands. Establishing market value of a property is a complicated process. An experienced Realtor will do an in-depth evaluation of comparable properties that have recently sold, gone into escrow or are currently listed to determine what attributes add or detract from value, such as location, views, and upgrades. One can’t rely on an automated valuation such as a Zillow Zestimate or look at prices from 6 months ago. In this market prices can literally change overnight and anything but a thorough, up-to-the minute valuation could mean money lost.
Licensed agents might not show your property, leaving you with less qualified buyers. Often, sellers listing their own homes for sale are reluctant to pay a commission to a licensed agent who brings them a buyer. So where is the motivation for an agent to show that property? Also, even if a commission might be paid, many agents are reluctant simply because they know that getting into a negotiation with a non-professional can mean headaches and most of the work landing in their lap. A buyer that is not represented by an agent can lead to problems as you now have non-professionals on both sides of the transaction. How do you know your buyer is even qualified?
Selecting the wrong offer can cost you time and thousands of dollars. Choosing the first offer or the buyer with the highest offer may not be your best choice. Does the buyer have a pre-qual letter or full DU approval? Has the buyer provided proof of assets for the down payment? Do they have a home to sell before they can buy? Are they asking you to pay for certain closing costs? Should you counter at a higher price? Will they allow you to rent-back if needed? To avoid falling out of escrow, an experienced Realtor helps you select an offer that best fits all your needs in terms of price, qualification and timing.
Inexperience in negotiating price and terms including repairs can cost you thousands. Negotiation is a skill that is not learned overnight. An experienced Realtor representing a seller is obligated to get the best possible deal for his/her client. This may mean countering for a higher sales price but some of the most important negotiating happens after the initial contract is signed and the home inspection takes place. Buyers can ask for anything, but most sellers are not aware that they can reject all or some requests. Should a home with a $1.2 million price tag be termite free? Probably, but that doesn’t necessarily mean that the 10-year-old water heater should be replaced at seller’s expense. Requested repairs need to be considered in the context of the purchase price, the desirability of your buyer and what the market will bear.
Lack of knowledge regarding disclosure requirements can leave you legally vulnerable and cost you thousands. Did you know there are a minimum of 12 different disclosure forms that should be a part of every sales transaction? Disclose, disclose, disclose! It might not seem important that you had a small roof leak 5 years ago, or that the fence you share with your neighbor is entirely on your property. But trust me; the smallest defect or incident can come back to haunt you in the form of a lawsuit if you haven’t disclosed it to your buyers.
Selling your home is a huge, often emotional transaction. It is your Realtor’s job to guide you through the process and ensure the best possible outcome. Even if you are selling to a friend or tenant, hire a Realtor to manage any negotiation and the paperwork to keep you protected.
Ready to sell or just curious about what your home is worth? Just give me a call. I’m here to help with all your real estate needs.
Photo courtesy of Realtor.com